Into the Red: Can PnL Metrics Predict Ethereum Prices?
- By Bilal Hafeez and Dalvir Mandara
- 12 min read
Summary
Trading View (next 2-4 weeks): We like to be bearish ethereum.
Investment View (next 1-3 years): We like to hold ethereum.
Macro Signals
- The Fed will likely announce more aggressive hiking on Wednesday.
- The ethereum correlation with tech stocks is starting to rise again, currently around 57%.
- The probability of a recession exceeds 50%.
- The macro backdrop is bearish for ethereum.
On-Chain/Flow Signals
- We have five bearish signals and two neutral signals this week.
Overall View
- With the macro backdrop bearish and on-chain/flow metrics very bearish, our overall signal is more bearish ethereum (Chart 1).
Macro: Hikes? Yikes! The Meltdown in Crypto
Friday’s hotter-than-expected inflation data has sent stocks and crypto tumbling. May CPI for the US came in at +8.6% vs +8.3% expected. Ethereum is currently amid a cumulative drawdown of around 75% since November highs and trading at around $1,200 – its lowest level since January 2021 (Chart 2).
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